Implementation of corporate governance principles in a South African JSE-listed multinational organisation .
Date
2014-07-28
Authors
Low, Carnita
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Abstract
ABSTRACT
Multinationals in South Africa with foreign shareholders often have to comply with
more than one system of corporate governance. This study assessed how the
board of directors of a single JSE listed multinational organisation reconciles and
applies the corporate governance requirements of three different corporate
governance systems, being the United Kingdom Combined Code of Corporate
Governance, the German Corporate Governance Code and King III Report on
Governance for South Africa.
The research methodology used was qualitative and data was gathered using
both semi-structured interviews as well as other documentary sources of
information. A themed content analysis was conducted based on the responses
of ten participants interviewed. The participants were members of the board of
directors of the organisation and provided personal insights into the application of
the three systems of corporate governance as well as identified challenges in
doing so.
The research findings indicate that only one director had full and detailed
knowledge of the different requirements of all three systems of corporate
governance and thus the board as a whole could not effectively apply three
systems of corporate governance. Local directors place large emphasis on local
requirements while foreign directors place more emphasis on foreign
requirements, creating various tensions in implementation.
The key message from this research is that board education and detailed
knowledge about what systems of corporate governance are applicable to
multinationals is critical in effective implementation of corporate governance.
Description
MBA 2013
Keywords
Corporate governance, Directors of corporations.